Three Mile Island to close after bailout bill stalls in Pennsylvania legislature

Author

Published

Share it

Dive Brief:

Exelon Generation on Wednesday said it will shut down Unit 1 of the Three Mile Island (TMI) nuclear power plant by Sept. 30, after a roughly $500 million bailout bill stalled in the Pennsylvania legislature.

The company initially announced its plans for the plant's permanent shutdown in May 2017. Exelon attributed its decision to economic challenges and market flaws that fail to recognize the environmental and resiliency benefits of nuclear power in the state.

Exelon last month filed the federally required Post Shutdown Decommissioning Activities Report in which it details its plans for TMI after its final shutdown. Dismantling the plant, including removing the spent fuel at Unit 1, could take six decades and cost more than $1 billion, media reported, citing Exelon estimates.

Dive Insight:

Some of Pennsylvania's legislators heeded Exelon's warnings that it needed more support to keep Three Mile Island open. But their proposal elicited strong opposition from at least one Pennsylvania utility commissioner and an industrial energy user group and was ultimately too little, too late.

​With the current legislative session coming to an end, lawmakers failed to advance both House Bill 11 and Senate Bill 510, which would have declared nuclear energy a carbon-free energy source eligible for state subsidies. Adding nuclear to the state's Alternative Energy Portfolio Standard would have provided about $500 million annually to the state's nuclear plant operators.

The upcoming shutdown of Unit 1, which Exelon purchased in 1999, will not only impact hundreds of workers at the plant but also the state's clean energy goals, as power from coal and natural gas-fired power plants is expected to replace the lost capacity from the nuclear facility.

"Today is a difficult day for our employees, who were hopeful that state policymakers would support valuing carbon-free nuclear energy the same way they value other forms of clean energy in time to save TMI from a premature closure,” Bryan Hanson, Exelon senior vice president and chief nuclear officer, said in a statement.

Both bills failed to get out of committee.

Last month, Pennsylvania Public Utilities Commissioner (PUC) Andrew Place wrote a memo in which he voiced his opposition to SB 510.

"While human health and environmental quality; job creation and retention; and maintaining a robust tax base are all cornerstone public policy goals, this bill, in its current form, is far from the least cost mechanism to achieve these goals," Place wrote.

The commissioner criticized the measure's high cost burden for ratepayers, while Exelon pointed to the environmental benefits of nuclear energy.

"Exelon Generation strongly encourages the timely passage of this bipartisan legislation, which will put Pennsylvania on a path to a clean energy future, preserve 16,000 good-paying jobs and save consumers $788 million a year in energy costs," the company said in statement to Utility Dive last month.

Unlike Pennsylvania, New York and Illinois approved nuclear subsidies in 2016 and 2017, respectively. Connecticut and New Jersey have also enacted programs to assist the generators threatened with early retirement because of competition from natural gas and renewables.

On April 15, the U.S. Supreme Court decided that it will not hear a pair of cases challenging the state nuclear subsidies in New York and Illinois, affirming the legality of the similar programs.